Kingsview CIO Scott Martin On Fox Business Making Money with Charles Payne 11.14.2023
CHARLES PAYNE: The world has been flipped upside down. So if the script changes again, what should you do? Well, I want to bring in now Kingsview Wealth Management CIO Scott Martin. Scott. Hey, in person my man,
SCOTT MARTIN: I know, it’s amazing. Can we make it real? Make it live –
PAYNE: No tacos.
MARTIN: I knew you would say that. Man, I wanted to bring the tacos this time.
PAYNE: All right,
MARTIN: I brought the market rally.
PAYNE: Everyone says okay, as soon as inflation. We have two years ago. Right. We got up to 9%. Everyone says you got to be in gold. You got to be in commodities. If you’ve been around long enough, you can see why these are huge gains. How do you explain the fact that particularly with gold, it didn’t happen this time? Same thing. Small caps. Small caps were up the last couple of times. Small caps are…
MARTIN: Painful – To use your word.
PAYNE: But so what happened? What’s the difference this time around?
MARTIN: Yes, and unfortunately I have been around long enough to remember some of these numbers, believe it or not, or in the room for part of that. But still, the point is, I was kind of on the earth. I guess, if you want to call it. The funny thing about gold, I think Charles is the following. The fact that the dollar rallied so much vis a vis with the fed was doing my man. So therefore we had the downward pressure a little bit in commodities are not as big. Let’s say it’s a 300 to 100%, but gold, especially, I think it took a lot on the chin also because of Bitcoin, Ethereum, some of these other alternative asset classes that are out there to take away some of that gold shine. Great point about the large caps though too. We’ve heard them all. We’ve been on the shows with them too. And I’ll tell you, the large caps have been both a growth area and somewhat of a safe haven. In the storm
PAYNE: You mentioned the strong dollar. Is that another reason? Again, according to the script, you want it to be in emerging markets? I mean, after all, it worked every single time. At the beginning of the year, I would say 99 out of 100 experts, said Charles. Emerging markets load up on them. They’re getting crushed. They’re getting hammered. What’s going on? Is that all the strong dollar? Is there something else there?
MARTIN: So you’re telling me there’s a chance they’re going to work? I guess you’re still young, I would say I know, man, hopefully that’s a reference that gets picked up. The funny part about emerging markets, Charles, that we talk about to on on your show when I’m back in Chi town. Emerging markets aren’t as positively sloped though as the S&P 500 is. So it’s been great to see some money flows going to emerging markets. But I agree with you. It’s been that kind of overseas, let’s say trade or that overseas trend of companies actually doing business overseas for real this time, not just making stuff there and selling it back in the United States.
PAYNE: So if this gets flipped. Let’s say at some point we get and we’re not going to get under 2% anytime soon. But let’s just say at some point the trend is low enough that we’re not concerned about inflation rearing its ugly head again.
MARTIN: Sounds awesome.
PAYNE: Does this flip do you flip the script or do you stick with what’s winning?
MARTIN: I think you stay with the script because I think this is a kind of script that if you look at the returns too, I love how you have this set up. The returns are still, in a weird way, muted I mean, 25%, 55, 47, 34.
PAYNE: There’s no 300.
MARTIN: No man I want these. And I think those are coming. Maybe not 300 but let’s say okay three maybe 299 right. I mean the point of the market is starting to feel out. I think what the fed is not willing to tell us yet, which is that inflation is going to be under control, rates are going to be under control. And therefore companies can anticipate their borrowing costs. Consumers can anticipate the leverage cost and boom shakalaka up in the air we go.
PAYNE: So for the audience we’ve got the ten year bond yield. It’s inverted right. So that means when it’s down here obviously the exact opposite is going up. But you can see there’s a correlation for years forever with the stock and bond market. And that really started to separate. Now we got bond yields. They’re starting to come down a little bit today which will be going up this way in the stock market. Yeah I can do that.
MARTIN: Can I try that. The stock market kind of does this thing.
PAYNE: You know usually.
MARTIN: I’ve been wanting to do that all day.
PAYNE: Usually you know you can’t touch the screen on the first time.
MARTIN: Sorry I was trying to do my John Madden came out there. I’m sorry. Excuse me.
PAYNE: Usually you can’t touch it.
MARTIN: Don’t do that again.
PAYNE: But are we going to see it return to this correlation. Because a lot of people said something has to break either yields or the stock market. Something has to make this correlation.
MARTIN: It does. Now to your point, things got so whacked out that there’s going to be some return to correlation. There’s going to be some, let’s say, better behavior, as they always told me in high school, like behave yourself a little better. But you’re right to the point of rates can only go down so far and they’re not going to zero. So let’s just say the ten years are benchmark pulls back to 4%. So you’re going to see that correlation to that level. And then I think what ends up happening Charles is the bonds kind of flatten out. But then the equities take off.
PAYNE: All right great stuff man.
MARTIN: Hey man good to see you. I promise I won’t touch that screen again unless I ask first for some money.
PAYNE: Thank you Scott